Sugar Grove expects 2010 property tax revenues to be flat

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SUGAR GROVE – Continued weakness in the local and national economy likely will translate into slightly higher property taxes for homeowners in coming years.

While the tax rate for the property taxes due in 2010 has not yet been set, property owners in the village of Sugar Grove should expect to pay a bit more when next year’s tax bills arrive.

“We don’t know exactly how much it will be,” said Sugar Grove Finance Director Justin VanVooren. “But we know it is going to go up some.”

On Tuesday, the Sugar Grove Village Board began the process of establishing the property tax levy request for the next fiscal year.

That property tax collection, which will occur in 2010, will be based on assessments established for the 2009 fiscal year.

Overall, VanVooren recommended to the village board to approve submitting a levy request to Kane County for about $2.4 million. That request would mark an increase of 69 percent over the amount of tax collected from 2008, when the village brought in about $1.42 million.

However, VanVooren noted that the village does not actually expect to collect much of that increase, if anything.

The village’s levy request is restricted by Illinois tax cap, which limits the amount the village can receive to the Consumer Price Index. As such, the village, like other municipalities, routinely requests far more than it expects to actually receive.

In 2008, for instance, the village requested $2.2 million. It received almost $1 million less, as the CPI was 4.1 percent.

This year, VanVooren said, the CPI is 0.1 percent, meaning he expects the village to actually receive only about $13,000 more in property taxes than it did last year, as assessments fall and new construction remains very rare.

The stagnating revenue is only further complicating a precarious budget situation at Sugar Grove Village Hall, said Village Administrator Brent Eichelberger.

He noted that the village has now established a goal of limiting its deficit for the 2009-2010 fiscal year to $100,000. To meet that goal, the village has implemented a wage freeze, laid off three full-time employees and a part-time employee and have chosen not to replace three other full-time workers who retired or quit.

The board on Tuesday also approved two furlough days for all non-police employees between now and the end of the fiscal year.

Further cuts may need to come, however, as the village expects to run an even larger deficit next year, Eichelberger said.

“We’re doing everything we can to control spending,” Eichelberger said. “But we know there are at least two more tough years ahead of us.”

However, flat revenue and falling assessments does not mean taxpayers should expect necessarily to pay less in taxes.

“It’s the same amount of tax dollars being collected,” VanVooren said. “It’s just that it’s spread against less assessed value.”

So, he said, property owners should expect their tax rates to continue to increase.

In 2008, tax rates rose to 42.21 cents per $100 assessed value from 41.18 cents in 2007.

Next year, VanVooren said, tax rates could rise again to about 43.5 cents.

If property values were to hold constant, that would mean a homeowner with a home with a market value of $300,000 would be required to pay about $13 more in taxes to the village.

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